David consumes 2 things gasoline g and bread b davids

Reference no: EM13378693

David consumes 2 things: gasoline (G) and bread (B). David's utility function is U(G,B) = 10G0.25B0.75.

a. Use the Lagrange method to solve for David's optimal choices of gasoline and bread as a function of the price of gasoline, PG, the price of bread, PB, and his income Y.

b. If the price of gasoline increases, does David reduce his consumption of gasoline?

c. Show how David's change in gasoline consumption due to an increase in the price of gasoline (dg/dp_g) depends on his income.

Note: please use both math and words to explain (its ECN/MAT) class

Reference no: EM13378693

Questions Cloud

1 suppose that the production of 1 million worth of steel : 1. suppose that the production of 1 million worth of steel in canada requires 100000 worth of taconite. canadas normal

The present value of the following 2 cash flows are : the present value of the following 2 cash flows are equivalent if the interest rate is i. which one is more valuable if

1 under what conditions does a nominal tariff applied to an : 1. under what conditions does a nominal tariff applied to an import product overstate or understate the actual or

Consider the production function flk l ka suppose k is : consider the production function flk l k.a. suppose k is fixed at 2. find algebraic expressions for the total product

David consumes 2 things gasoline g and bread b davids : david consumes 2 things gasoline g and bread b. davids utility function is ugb 10g0.25b0.75.a. use the lagrange

Frisbees are produced according to the production function : frisbees are produced according to the production function q 2kl where q output of frisbees per hour k capital input

Below you will find four different scenarios each one : below you will find four different scenarios. each one represents a different quarter of the year with the initial

1 lehner corporation has provided the following data from : 1. lehner corporation has provided the following data from its activity-based costing accounting systemnbsp indirect

Dermine the proper equations to find pw of each machine : determine the proper equations to find pw of each machine. the cost of money is 10 per

User Account

All Pages